Ormat Industries (TASE: ORMT NYSE: ORA) announced on Friday that it had completed negotiations for two new 25 year Power Purchase Agreements (PPA) with Southern California Public Power Authority (SCPPA) for the purchase of renewable energy from its geothermal projects at the Ormesa Geothermal Facilities Complex and the Heber Geothermal Facilities Complex.
Under both energy-only PPAs, 10 MW (each) will be delivered. The product will be sold at a fixed price of $57.50/MWh with an annual escalation of 1.5%. In addition, 30% of the Production Tax Credits if and when available, will be shared with the power purchasers.
Annual revenue from each PPA is estimated at $5 million.
Both PPAs are expected to be entered into in the coming weeks.
Ormat also announced that it celebrated the ground breaking and dedication of a new geothermal power plant within the Heber Geothermal Facilities Complex on Monday May 2. The new plant is dedicated to Mr. William R. Gould, who served as the Chairman of Southern California Edison (SCE) from 1980 through 1984, and was a driving force behind much of California's renewable energy programs.
The new 10 MW William R. Gould plant is part of an 18 MW enhancement at the Heber Geothermal Facilities Complex, including an 8 MW enhancement to existing facilities, which supply power to Southern California Edison under ongoing PPAs.
Ormat shares closed at $16.04 in New York on Friday, giving the company a market cap of $502 million.
Published by Globes [online], Israel business news - www.globes.co.il - on May 8, 2005